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Cleveland bank bids on lease for Venice Inn

September 15, 1999|By DAN KULIN /Staff Writer

In an unusual public auction of a long-term lease Wednesday, the Cleveland bank that foreclosed on a lease for the Venice Inn in Hagerstown was the high bidder for that lease.

Metropolitan Bank and Trust Co. in Cleveland bid $100,000 for the lease on the Venice Inn at the corner of Dual Highway and Cleveland Avenue. The lease, including options to extend it, could remain in force for more than 90 years.

It was unclear Wednesday what the eventual result of the auction may be. The company that originally held the lease is challenging the foreclosure in federal court.

Day-to-day operations at the Venice Inn are expected to continue as they are, hotel General Manager Joe Bencivenga said.

Bencivenga said the auction will not affect hotel employees, operations or the status of the shops inside the hotel.

Bencivenga works for the New Jersey management company Prime Hospitality Corp., which has operated the Venice Inn since June.

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Metropolitan Bank and Trust Co. prompted the public auction when it foreclosed on a loan taken by Nielsen Enterprises, a Maryland limited liability company. Nielsen Enterprises had used the lease on the Venice Inn as collateral for a loan from the bank.

The lease agreement was signed April 10, 1998, by Nielsen Enterprises and the property owners Hagerstown Maryland LLC and Venice MD LLC.

According to court records, Nielsen Enterprises was late paying or did not pay two $25,000 monthly lease payments in February and March. Nielsen Enterprises stopped operating the hotel in March.

Lawyers and representatives for most of the parties involved declined to comment on the pending auction.

A lawyer not connected with the matter, Jim Vidmar, who specializes in bankruptcy law with the firm Linowes and Blocher in Silver Spring, Md., said the sale of a lease by public auction was unusual. Typically in public auctions ownership is changing hands.

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